Home prices post first monthly gain since 2024 as housing starts slow in July

Canada's resale housing market showed more signs of stabilizing in July, even as new construction lost momentum, according to two reports released Tuesday.

The Canadian Real Estate Association said its national composite MLS Home Price Index rose 0.1 per cent from June, the first monthly increase since November 2024. Separately, Canada Mortgage and Housing Corp. said the seasonally adjusted annual rate of housing starts fell 5 per cent to 229,074 units, from 240,773 in June.

Resale: slow and steady

"At the national level, July's housing data was a carbon copy of the June numbers," said CREA senior economist Shaun Cathcart: sales edging up, listings edging down and prices stable.

Prices fell year over year in Ontario and British Columbia and rose in all other regions. Saskatchewan, New Brunswick and Newfoundland and Labrador remain borderline sellers' markets.

• Seasonally adjusted sales rose 0.5 per cent from June, a fourth consecutive monthly gain; actual sales of 43,578 homes were 5.3 per cent below July 2025.
• New listings fell 1.6 per cent, the third straight decline.
• The sales-to-new-listings ratio was 51.3 per cent, within the 45 to 65 per cent range considered balanced.
• There were 4.7 months of inventory, the lowest of 2026 so far and slightly below the long-term average of five months.
• The benchmark price was still 3.3 per cent lower than a year earlier, while the average sale price of $674,819 was up 0.2 per cent.

New construction: fewer shovels in the ground

CMHC's six-month trend of starts was 247,377 units, down 0.5 per cent from June. Actual starts in centres of 10,000 people or more fell 19 per cent from a year earlier to 18,834 units, and year-to-date starts of 131,851 were down 4 per cent.

Actual starts fell 42 per cent in Vancouver and 10 per cent in Toronto, but rose 3 per cent in Montreal on multi-unit construction. "Housing starts are likely to remain subdued over the coming months," said CMHC deputy chief economist Tania Bourassa-Ochoa, though she noted completions are rising and the large pipeline of units under construction will keep adding supply.

Two readings of the same market

Optimists see a floor forming under prices after a long slide, with buyers slowly returning as inventory tightens. CREA chair Garry Bhaura said more moderate conditions should keep bringing buyers off the sidelines.

The risk is that the slowdown in starts today becomes a supply shortage later, especially in Toronto and Vancouver, where new projects are hardest to finance. And with inflation at 3 per cent, the prospect of further interest-rate relief is uncertain.

What it means for buyers and owners

For buyers, a balanced market still means room to negotiate in many cities, particularly in Ontario and B.C., but the window of falling prices may be narrowing. For sellers and owners, a 0.1 per cent monthly gain is a stabilization, not a rebound. Anyone planning a purchase should stress-test their budget at higher rates and plan for closing costs. This is general information, not personal advice.

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